Minnesota Court Allows Punitive Damages Claim Against Contractor

Nicholas A. Loyal

Punitive damages in construction cases are rare, but the Minnesota Court of Appeals recently allowed a driver to seek punitive damages after he was injured by debris falling from a construction company's truck. The court's decision provides a framework for punitive damage claims to proceed against contractors and serves as a cautionary tale for those who are involved in the construction industry.

In Carney Lien v. Casper Construction Inc., et al., a driver was hurt when a rock fell off of a dump truck hauling gravel from a pit to a construction site, broke through his windshield, and caused major injuries. After settling with the trucking company and the gravel pit, the driver went to trial against Veit & Company, which was responsible for supplying the gravel being hauled.

At trial, Veit argued that the injury was the result of a "freak accident," while the driver argued that Veit was filling dump trucks dangerously full—so much so that rocks were falling off the top and sides of its trucks as they drove away. The injured driver produced testimony from eyewitnesses to the accident, as well as truck drivers on the project who testified that the trucks were being consistently overloaded. The jury found for the driver, and awarded $4,754,973.67 in compensatory damages.

Generally, in order to obtain punitive damages under Minnesota law, the party seeking damages must provide evidence that clearly and convincingly shows a "deliberate disregard for the rights or safety of others." Minn. Stat. § 549.191 et seq. That standard is met if the evidence shows that the offending party "has knowledge of facts or intentionally disregards facts that create a high probability of injury to the rights or safety of others" and either deliberately proceeds to act with indifference or conscious disregard of that probability for injury. Id. at subd. 1(b). If awarded, punitive damages can greatly exceed the actual damages sought by a plaintiff in a lawsuit, as they are designed to punish an offending party to such a degree that the wrongdoing is not repeated.

In Carney Lien, the injured driver sought punitive damages after the verdict based on affidavits from five truck drivers working on the project asserting that Veit not only overloaded its dump trucks, but that it continued to do so despite complaints about the safety of this practice. While the district court denied the motion and struck the claim for punitive damages, the court of appeals reversed, finding that the district court abused its discretion by improperly weighing the evidence presented. As a result, the court of appeals remanded the case to the district court for further consideration of whether punitive damages were proper.

While it remains to be seen what the ultimate resolution of the punitive damages issue will be at the district court level, the court of appeals opened the door for claims seeking punitive damages by providing a framework for the type of damages needed to support such a claim. Specifically, if an injured party can present evidence establishing that a contractor is knowingly acting in a manner that could be detrimental to public safety, the contractor could face punitive damages for any injuries resulting from that action.

Obviously, construction companies should not knowingly act in a dangerous manner or disregard potential harm to public safety. However, in this case, the truck driver himself had a responsibility to secure his load and not allow his truck to be overfilled. To hold the excavator responsible for enormous damages resulting from such an accident creates the potential for extending punitive damages beyond their traditional limits.